Samvat 2079 Begins: What Lies Ahead for Indian Stock Markets?

Mon, 24 Oct Pre-Open

   Previous Close   

   Closing   

Dear reader,

Let us start off by wishing you a very Happy Diwali and a prosperous year ahead.

Diwali is a celebration of difficulties gone by. It is a hope of better things to come. Hence, as Samvat 2078 comes to an end, let us take a moment to review one of the most difficult years of the Indian stock market.

Despite the steep market correction and the volatility we witnessed this year, Indian share markets ended the year on a slightly positive note.

Samvat 2078 was the worst year for the Indian stock market out of the last seven. In June 2022, both indices tumbled 15%! Tightening liquidity after pandemic, geopolitical tensions, rising interest rates, supply chain disruptions, FII selling, etc. took a toll as the year progressed.

However, the markets gradually came out of their depression. As the year progressed most of the losses were erased and indices ended marginally lower.

At the end of Samvat 2078, the BSE Sensex ended 1% lower and Nifty registered losses of 2%. It is noteworthy that the fall in Indian indices was quite lower compared to developed markets and peers.

Samvat 2078 was a reminder of trusting the old techniques over the new ones as value stocks outperformed growth stocks. Rising inflation and interest rate hikes hammered growth stocks this year.

Even while considering sectors, traditional sectors outperformed. While new age tech stocks proved to be the biggest wealth destroyers.

The FMCG sector, auto sector, metal sector and banking sector were the top-performing sectors this Samvat.

Banking stocks rallied towards the end of the year as strong credit growth along with rise in lending rates came at a time when NPA levels moderated, and treasury incomes were high.

Higher than expected profit growth was expected and the best banking stocks delivered.

On the other hand, pharma, media, realty and IT sectors were the worst performing sectors. Investing in the IT sector in particular was a nightmare for investors as even the best IT stocks bled.

Undoubtedly, the Adani group was the star performer. Adani Enterprises share price gained 125.4% from the Nifty and became the top-performing stock. The next in line was ITC with 54.4% gains followed by Coal India.

To say that ITC's performance surprised investors would be an understatement. But after rising after a long period of stagnancy, will ITC rise more or will it crash?

Rahul Shah - Co-head of research at Equitymaster, answers this question in one of his recent videos: ITC in 2023: a new high or a big crash?

Coming to losers, Wipro and Tech Mahindra topped the list of losers.

Selling from foreign institutional investors (FII) was a sign of grave concern. From October 2021, FIIs started divesting from Indian markets to return to the safety of the dollar.

FIIs selling in the first five months was higher than the total FII buying in 2021. This took FII investment in India to the lowest for the entire decade.

What's noteworthy is that Indian indices barely fell. One of the biggest reasons for the 2008 market crash was FII selling. However, this time the FII selling was set off by domestic institutional investor (DII) buying.

In the first six months of the calendar year, DIIs invested Rs 2 tn in the market.

Currently, the winds have changed it appears. FIIs are coming back to Indian markets slowly. Improving supply chain, strong growth prospects of the country, improving financials and massive DII buying has lured FIIs back to Indian markets.

In the primary markets, the activity was dead until recently. Companies which received approval for IPOs and held back are now exploring entering the markets.

What Next?

Central banks over the world are worried about rising inflation. The fear of rising interest rates continues to remain a concern.

If there's a global recession, India will be better placed. The China plus one strategy is a key reason for this while government's focus on PLI schemes is a driving growth factor.

There are a lot of megatrends shaping up in India and if selected carefully, certain stocks from this sector can become future multibagger stocks.

For starters, you can check out these themes on Equitymaster's Indian stock screener.

Here apart from getting access to readymade watchlist following various themes you can also create your own watchlist and track some of the highest potential stocks.

Riding the recovery from the forefront will be smallcap stocks as they rebound along with Indian economy. Smaller companies were the top picks in recent months and they might continue to be in the near term. However, many smallcap stocks can also go bust in 2023, so one has to be careful while picking them.

IT and pharma sectors have hit their bottoms and their performance will have the attention of many investors.

Going into Samvat 2079, examine whether the current market environment is conducive for picking stocks or whether we are in bubble territory.

If you want to invest profitably in Samvat 2079, then your strategy should be based on what you want from your portfolio.

Decide what you want from your portfolio and stick to it.

Legendary investor Warren Buffett would agree when we say that only when the tide (i.e. liquidity) goes out, will investors find out the stocks which were strongest.

Your portfolio may or may not be reeling under some pressure, but now is not the time to panic. We believe investors will be far better served if the focus is on individual stocks by following a bottom-up approach to investing.

As always, we recommend buying stocks with solid fundamentals only when they are available at attractive valuations. Time will then work in your favour and provide you with satisfactory returns.

In short, ignore the noise, stick to fundamentals and you should do well.

As far as our views on Indian stock markets are concerned, here are some links to videos and articles from our editors that you may find interesting:

• Diwali Picks for Samvat 2079
• Smallcap Stocks that Could Go Bust in 2023
• My Top Diwali Recommendation
• The Trillion Dollar Sector of 2025 - Chapter I: 5 Stocks to Watch Out For
• The Biggest Theme in the Stock Market I'm Bullish on Today
• The Next Infosys May Not be a Tech Stock

Well, that's all from us.

We once again wish all Equitymaster readers a very Happy Diwali!

Have a great year ahead!

PS: As usual, our editors have been busy on YouTube.

Check out the recent video where Rahul Shah talks about his top pick for Diwali.

Happy Investing!

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary

Top Gainers TodayTop Gainers over 1-WeekTop Gainers over 1-MonthTop Gainers over 1-YearTop Gainers over 3-YrsTop Gainers over 5-YrsTop Losers TodayTop Losers over 1-WeekTop Losers over 1-MonthTop Losers over 1-YearTop Losers over 3-YrsTop Losers over 5-YrsOnly BuyersOnly SellersMost Active StocksMost Popular Stocks52 Week High Stocks52 Week Low Stocks

INDICESBSE (Rs 0 to 1)BSE (Rs 1 to 2)BSE (Rs 2 to 4)BSE (Rs 4 to 10)BSE (Rs 10 to 20)BSE (Above Rs 20)BSE - AllBSE-30BSE-100BSE-200BSE-500BSE AutoBSE BankexBSE Capital GoodsBSE Consumer DurablesBSE FMCGBSE HealthcareBSE ITBSE MetalBSE Oil & GasBSE PSUBSE TeckBSE RealtyBSE PowerBSE A GroupBSE B GroupBSE Mid-CapBSE Small-CapBSE Basic MaterialsBSE Consumer DiscretionaryBSE IndustrialsBSE UtilitiesBSE Sensex 50BSE Sensex Next 50BSE Bharat 22BSE 150 MidCapBSE 250 SmallCapBSE 250 LargeMidCapBSE 400 MidSmallCapBSE AllCapBSE LargeCapBSE SmallCap SelectBSE 100 LargeCap TMCBSE InfraBSE ManufacturingBSE CPSEBSE Private BankBSE Diversified FinancialsBSE MomentumBSE Low VolatilityBSE QualityBSE Enhanced ValueBSE Divident StabilityS&P BSE IPOBSE SMEIPOBSE 100 ESGBSE CarbonexBSE GreenexNSE (Rs 0 to 10)NSE (Rs 10 to 20)NSE (Above Rs 20)NSE - AllNSE-50NSE ITNSE Nifty Midcap 50NSE JR. NiftyNSE Bank NiftyNIFTY Next 50NIFTY 100NIFTY 200NIFTY 500NIFTY MidCap 100NIFTY SmallCap 250NIFTY SmallCap 50NIFTY SmallCap 100NIFTY LargeMidCap 250NIFTY MidSmallCap 400NIFTY AutoNIFTY Consumer DurablesNIFTY FinanceNIFTY FMCGNIFTY MediaNIFTY MetalNIFTY PharmaNIFTY Private BankNIFTY PSU BankNIFTY RealtyNIFTY Oil & GasNIFTY SME EmergeNIFTY CommoditiesNIFTY CPSENIFTY EnergyNIFTY India ConsumptionNIFTY InfraNIFTY MNCNIFTY PSENIFTY Serv SectorNIFTY100 Liquid 15NIFTY Midcap Liquid 15NIFTY Midcap 150 Quality 50NIFTY50 Equal WeightNIFTY100 Equal WeightNIFTY100 Low Volatility 30NIFTY100 Alpha 30NIFTY Alpha 50NIFTY Dividend Opportunities 50NIFTY High Beta 50NIFTY Low Volatility 50NIFTY200 Quality 30NIFTY 500 Value 50NIFTY 100 Quality 30SECTORSAgricultureAirlinesAluminiumAsset Management CompaniesAutomobilesAuto AncillariesBanks (Private)Banks (PSU)BankingCementChemicalsDefenceDiagnosticsDronesEngineeringElectric VehicleElectric Vehicle BatteryEnergy SourcesESGEthanolFertilizersFintechFMCGFoodGreen HydrogenHotelsInfrastructureInsuranceInvestment and FinanceInvITIT (Large)IT (Others)LogisticsMediaMetalMiningIndia's Big Tech StocksIndian PharmaMNC PharmaPSUPaintPaperPlasticPowerRating AgenciesReal EstateREITsRenewable EnergyRetailingSemiconductorShippingSteelSugarSupply ChainTelecomTextilesTravel Support Services

10 results 25 results 50 results 100 results All results

Indian Share Market Update: Top Gainers and Losers